Emerging Stocks Decline on Chinese Report as Won Slumps

Jan. 6 (Bloomberg) -- Emerging-market stocks dropped to a
four-month low after Chinese economic data bolstered concern
growth is slowing. South Korea’s won fell the most in six months
amid speculation the central bank will cut interest rates.

The MSCI Emerging Markets Index slipped 0.7 percent to
972.42. The Shanghai Composite Index sank to a five-month low
after Chinese gauges of manufacturing and services industries
fell. Russia’s Micex Index slumped 2.5 percent, led by OAO
Gazprom, while Brazilian retailer Cia. Hering drove the Ibovespa
down. Turkish stocks rose the most in the world as bank
valuations near a five-year low attracted investors. The won
depreciated as a weak Japanese yen threatens exports.

Commodity shares paced losses in developing nations after
HSBC Holdings Plc and Markit Economics data showed that a non-manufacturing index in China declined to 50.9 in December.
Investors also watched U.S. reports showing that growth in U.S.
service industries unexpectedly weakened last month while
factory orders rose in November. The measure for emerging-market
stocks has dropped 3 percent this year after trailing shares in
developed countries by the most since 1998.

“China is a major user of commodities. That could explain
why emerging markets are taking a hit,” Peter Jankovskis, who
helps oversee $3.5 billion as co-chief investment officer of
Lisle, Illinois-based OakBrook Investments LLC, said by phone.
“Until we see a significant pickup in global growth, emerging
markets will continue to struggle.”

Most Brazilian stocks fell as Cia. Hering led retailers
lower after economists reduced their growth forecasts for the
country. Hypermarcas SA, a maker of consumer products, was the
worst performer on the MSCI Brazil/Consumer Staples index, which
dropped to a four-month low.

The Micex Index slumped the most since June 11 in Moscow as
Gazprom slid 2.5 percent. The Borsa Istanbul National 100 Index
rallied 3.1 percent, led by banks. Benchmark gauges in Hungary
and the Czech Republic retreated.

South Africa’s rand extended gains, strengthening for the
first time in five days, after Moody’s Investors Service said
the nation would probably retain its investment-grade credit
rating. Bonds pared declines.

China, India

The Shanghai Composite Index slid 1.8 percent to its lowest
level since Aug. 8. China Railway Group Ltd. plunged the most in
more than two months after the company said its president died
in an accident. CSR Corp., the nation’s biggest train maker,
fell 3.9 percent. China Shenhua Energy Co. dropped 3.5 percent
after BNP Paribas SA said coal prices may decrease.

Indian stocks dropped for a fourth day, led by power
companies and lenders, as the benchmark index fell to its lowest
level in three weeks. Tata Power Co. had its biggest four-day
retreat since Aug. 7. ICICI Bank Ltd. declined to its lowest
level in six weeks. Coal India Ltd., the world’s largest miner
of the fuel, dropped to a one-month low.

The won dropped posted the biggest decline since June 20.
The Thai baht dropped to its lowest since 2010 after overseas
funds pulled cash from the nation’s debt amid two months of
political protests that are sapping investor confidence.

The premium investors demand to own emerging-market debt
over U.S. Treasuries rose three basis points, or 0.03 percentage
point, to 312 basis points, according to JPMorgan Chase & Co.